Industry Voices—Raynovich: Is Cisco trapped? AT&T/DriveNets calls Silicon One into question

AT&T's white box announcement with DriveNets, Broadcom and Ufispace does not bode well for Cisco, according to analyst Scott Raynovich. (Pixabay)

In a shocker, AT&T put out a press release this week saying it has embraced a white box approach to its core routing networking using a combination of DriveNets routing software, Broadcom Jericho2 silicon, and UfiSpace hardware.

Open networking is gaining momentum again. The AT&T deal with DriveNets, Broadcom, and UfiSpace points to the fact that many service providers, including AT&T, want an unbundled solution. 

RELATED: Spotlight is on DriveNets with AT&T's deployment

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While this is a big win for open networking and all of the players in involved, what was more notable about the deal is what was missing —Cisco. AT&T’s press release made no mention of incumbent vendors it has used before and the deal raises serious questions about Cisco's new strategy to unbundle its hardware and software and sell its own chip, Silicon One, which competes directly with Broadcom. 

This left me with another question: What does Cisco think? 

Sound of crickets. (Note: After publication, we heard back from a Cisco spokesperson: "IOS-XR is already deployed in a few AT&T networks as white box software.")

Behind these scenes, there is more to this deal than meets the eye. I've been told by good sources that Cisco is still in the AT&T core routing network. It hasn’t been kicked out. It makes sense for AT&T to keep Cisco gear in the mix and large service providers prefer to keep multiple suppliers on hand. 

RELATED: Raynovich: Nvidia is now a network behemoth; incumbents should be nervous

But if Cisco is still in the mix, why is AT&T putting out a press release about open networking companies in its routing network? AT&T is probably using this deal to put pressure on Cisco and other competitors —possibly to reduce pricing. It's good for AT&T to have multiple supplies, including for hardware with both Broadcom and Cisco a possibility.

This raises questions about how well Cisco will compete with its new, confusing strategy of unbundling software and hardware and selling its new chip, Silicon One, separately. As I've written before, this strategy divides Cisco's previous agenda in selling high-priced integrated boxes into a multiple-headed monster of selling boxes and disaggregated hardware and software. It also raises serious questions about what’s going to happen to Cisco’s margins. 

Meanwhile, a new crop of distributed routing solutions— built from the ground up in the cloud, as software only— are now ready for prime time, as signaled by AT&T's selection of DriveNets. Another intriguing startup, Arrcus, has several deals with large webscale companies and is being evaluated by several large service providers, according to my sources. Pureport is also building a distributed cloud routing mesh using Free Range Routing (FRR) open-source software. Look for more deals to pop in this area. (Disclosure: My research firm, Futuriom, conducts and produces research for more than 30 clients, including Arrcus, DriveNets, and Pureport.)

Cisco's got plenty of competition from other incumbents, as well. Nokia, a routing leader, just released a re-designed cloud-based operating system called Nokia Service Router Linux (SR Linux). The game has now shifted to distributed, cloud-based routing, which Futuriom believes will play a major role in powering high-performance multi-cloud networks. 

Cisco will struggle to come up with the right marketing message here. Is it your friendly integrated solutions provider or a leading provider of unbundled open networking solutions? Is it a software vendor or a chip vendor? The networking leader is now trapped in a split personality of selling integrated solutions, unbundled software, and its own chips all at the same time. 

R. Scott Raynovich is the founder and chief analyst of Futuriom. For two decades, he has been covering a wide range of technology as an editor, analyst, and publisher. Most recently, he was VP of research at SDxCentral.com, which acquired his previous technology website, Rayno Report, in 2015. Prior to that, he was the editor in chief of Light Reading, where he worked for nine years. Raynovich has also served as investment editor at Red Herring, where he started the New York bureau and helped build the original Redherring.com website. He has won several industry awards, including an Editor & Publisher award for Best Business Blog, and his analysis has been featured by prominent media outlets including NPR, CNBC, The Wall Street Journal, and the San Jose Mercury News. He can be reached at [email protected]; follow him @rayno.

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceTelecom staff. They do not represent the opinions of FierceTelecom.

 

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